New Federal Regulatory Guidance on "Principal Place of Business"

On July 29, 2009, the FMCSA released a Notice of regulatory guidance relating to which locations may be designated as a "Principal Place of Business" by a Federal motor carrier. This new guidance went into effect on August 12, 2009. The notice is intended to answer questions related to 49 CFR 390.5, which defines a principal place of business as "the single location designated by the motor carrier, normally its headquarters...at which the motor carrier must make records required by [FMSC regulations] available for inspection." The current definition of "principal place of business" was adopted in 1998 in order to allow motor carriers with multiple terminals and business locations to maintain records, such as driver records of duty status or vehicle maintenance records, at a location where activity related to the records took place rather than at a company's headquarters. However, the FMCSA has still anticipated that in most cases, the "principal place of business" would be the same as a carrier's headquarters.

The FMCSA now offers additional guidance: (1) the "principal place of business" must be an actual place of business of the motor carrier; and (2) the "principal place of business" must contain offices of the carrier's senior most management or employees responsible for administration, management and oversight of safety operations and compliance with FMCS regulations. If more than one location fits this definition, the carrier must consider the relative importance of the activities conducted at each location, and the time spent at each location by the carrier's management or corporate officers. In addition to these factors, in determining whether a carrier has designated an appropriate location as its "principal place of business," the FMSCA will also consider: whether the location is operated, controlled, or owed by the carrier; whether operations relating to transportation regularly take place at the location; whether employees of the carrier report for duty at the location; whether any vehicles leased or owned by the carrier are maintained on the premises; and whether records required to be maintained by the FMCS regulations are on maintained on the premises.

A carrier cannot designate as its "principal place of business" a location where it is not engaged in business operations related to transportation. Prohibited locations include post office or other mail box locations and offices of consultants, service agents or legal counsel. Finally, a motor carrier with a single place of business, including a residence, must designate that location as its "principal place of business." Sending the DOT to inspect at 1066 W. Addison, Chicago, IL is also a bad idea, although it worked for the Blues Brothers in outwitting John Candy.

Notwithstanding the foregoing, a carrier with multiple business locations may maintain some records at a location other than its "principal place of business" provided however that after a request has been made by the FMCSA, a carrier with multiple business locations must make all required records available at its "principal place of business" within 48 hours. So having a "quick retrieve" system in place is a must if a carrier decides to implement a multiple location option.